First, our final lineup of external speakers is confirmed. All of our main-stage speakers are from companies featured in our new book, Outside In — some of them are even the subjects of case studies in the book.
Many of you have asked us to feature more business-to-business content in our events, so in response, we have both Randy Pond, EVP of operations, processes, and systems at Cisco Systems, and John Taschek, VP Mof market strategy at salesforce.com. Both companies are in the book, and Randy is the executive sponsor of the program that won one of our 2012 Voice Of The Customer Awards.
In addition to Randy and John, we have Dr. Jim Merlino, the chief experience officer for Cleveland Clinic, a world-famous, $6 billion healthcare provider. The work he is doing is as applicable to organizations outside of healthcare as it is relevant to all of us who have ever been (or will ever be) patients.
We’re also excited about our main-stage panel on building a customer-centric culture with Nancy Fratzke of US Cellular and Kelly Harper of BMO Financial Group. Transforming a culture is one of the hardest things any of us will do, and both of these panelists have successfully done it.
Well if you're going to make a dramatic about face from total dismissal of cloud computing, this is a relatively credible way to do it. Following up on its announcement of a serious cloud future at Oracle Open World 2011, the company delivered new cloud services with some credibility at this last week's show. It's a strategy with laser focus on selling to Oracle's own installed base and all guns aimed at Salesforce.com. While the promise from last year was a homegrown cloud strategy, most of this year's execution has been bought. The strategy is essentially to deliver enterprise-class applications and middleware any way you want it - on-premise, hosted and managed or true cloud. A quick look at where they are and how they got here:
Brocade held its Asia Pacific (AP) Partners Summit 2012 last week in the capital of China’s Yunnan Province, Kunming. For a company which has been the subject of perennial takeover rumors, I was interested to know if it had anything new to convey to its partners. I was also looking forward to meeting Regan McGrath, Brocade’s newly appointed VP for Global Channel Sales and Marketing and Charlie Foo, Brocade’sVP for the Asia Pacific region.
Brocade emphasized three key target areas for innovation and investment:
Ethernet Fabric: Brocade’s 2ndgeneration Ethernet fabric technology is aimed at organizations driving virtualization and cloud-related consolidation initiatives.
Campus Network: Part of its Effortless Network vision, Brocade’s recently announced HyperEdge technology targets innovation in the campus LAN market.
A few minutes ago, Wildfire Interactive was purchased by Google for a reported $250 million. Of course, this is a lot of money, and a great exit for Wildfire investors, but what does it mean for social marketers, especially B2B social marketers? It is part of an ongoing trend of consolidation as many smaller vendors have been bought by major companies in the industry such as salesforce.com, Oracle, and now Google. Just looking at vendors I examined (with Kim Celestre) in our October 2011 Market Overview of Social Media Platforms for B2B Marketing (subscription required), many of them are no longer independent companies, and we expect this consolidation to only accelerate.
As a partial list, and please let me know if I missed any major acquisitions (of course, Yammer was bought by Microsoft, and Instagram by Facebook, but neither are external social marketing solutions for B2B marketers):
Involver, July 2012, Oracle
Collective Intellect, June 2012, Oracle
Vitrue, $300M, May 2012, Oracle
Buddy Media, $689M, May 2012, salesforce.com
Crowd Factory, April 2012, Marketo
Alterian, January 2012, SDL
Radian6, $350M, March 2011, salesforce.com
Unisfair, $35M March 2011, InterCall (West Corporation)
In typical Microsoft fashion, they don't catch a new trend right with the first iteration but they keep at it and eventually strike the right tone and in more cases than not, get good enough. And often good enough wins. That seems the be the pattern playing out with Windows Azure, its cloud platform.
Just three months after SAP acquired SuccessFactors, a cloud leader for human capital management solutions, for $3.4 billion, it has now announced the acquisition of Ariba, a cloud leader for eProcurement solutions, for another $4.3 billion. Now, $7.7 billion is a lot of money to spend in a short amount of time on two companies that hardly make any profit. But it’s all for the cloud, which means it’s for the future business opportunity in cloud computing services. So far, so good; SAP has invested and acquired quite a number of cloud companies over the past years: Frictionless, Clear Standards, Crossgate, etc. The difference in this most recent acquisition is the big overlap with existing solutions and internal R&D.
Following the first wave of cloud acquisitions, SAP was sitting amid a zoo of cloud solutions, all based on different platforms: ePurchasing, CRM-OnDemand, BI-OnDemand, Carbon Impact, ByDesign, Streamwork . . . They all used very different technology, resulting in big integration and scale challenges behind the scenes. The market welcomed with open arms SAP’s announcement 1.5 years ago that it would consolidate its cloud strategy on the new NetWeaver platform for both ABAP- and Java-based cloud solutions.
OK, it’s time to stretch the 2012 writing muscles, and what better way to do it than with the time honored “retrospective” format. But rather than try and itemize all the news and come up with a list of maybe a dozen or more interesting things, I decided instead to pick the best and the worst – events and developments that show the amazing range of the technology business, its potentials and its daily frustrations. So, drum roll, please. My personal nomination for the best and worst of the year (along with a special extra bonus category) are:
The Best – IBM Watson stomps the world’s best human players in Jeopardy. In early 2011, IBM put its latest deep computing project, Watson, up against some of the best players in the world in a game of Jeopardy. Watson, consisting of hundreds of IBM Power CPUs, gazillions of bytes of memory and storage, and arguably the most sophisticated rules engine and natural language recognition capability ever developed, won hands down. If you haven’t seen the videos of this event, you should – seeing the IBM system fluidly answer very tricky questions is amazing. There is no sense that it is parsing the question and then sorting through 200 – 300 million pages of data per second in the background as it assembles its answers. This is truly the computer industry at its best. IBM lived up to its brand image as the oldest and strongest technology company and showed us a potential for integrating computers into untapped new potential solutions. Since the Jeopardy event, IBM has been working on commercializing Watson with an eye toward delivering domain-specific expert advisors. I recently listened to a presentation by a doctor participating in the trials of a Watson medical assistant, and the results were startling in terms of the potential to assist medical professionals in diagnostic procedures.
For years I have been railing about cloud washing -- the efforts by vendors and, more recently, enterprise I&O professionals to give a cloud computing name to their business-as-usual IT services and virtualization efforts. Now, a cloud vendor, with tongue somewhat in cheek, is taking this rant to the next level.
Appirio, a cloud integration and customization solution provider, has created the cloud computing equivalent of the Razzie Awards to recognize and call out those vendors it and its clients see as the most egregious cloud washing offenders. The first annual Washies will be announced next Wednesday night at The Cigar Bar in San Francisco, and in true Razzie tradition, the nominees are invited to attend and pick up their dubious honors in person. I'm betting that Larry Ellison will be otherwise engaged.
Some Reflections On The Deal For Competitors, Partners, and Customers
On December 3, SAP announced the acquisition of SuccessFactors, a leading vendor for human capital management (HCM) cloud solutions. SAP will pay $3.5 billion (a 52% premium over the Dec 2 closing price) out of its full battle chest and take a $1 billion loan. SuccessFactors brings about 1,500 employees, more than 3,500 customers, and about 15 million users to the table. In 2010, the company reported revenues of $206 million and a net loss of $12.5 million. A price of $3.5 billion is certainly a big premium, but the acquisition catapults SAP into the ranks of leading software-as-a-service (SaaS) solution providers — a business that will grow from $21.3 billion in 2011 to $78.4 billion by 2015 (for more information, check out our report “Sizing The Cloud”). The deal will certainly help SAP to achieve its 2015 target of $20 billion revenue and 1 billion users as it mainly targets the 500,000 employees that SAP’s already existing customers have. The deal is expected to close in Q1 next year. However, because most of the stocks are widely spread, stakeholders might hold back for now, waiting for possible counter bids from competition.
Picking through economic news this week (French and German growth numbers; financial market turmoil; scattered US indicators) and the vendor announcements from Dell, HP, Lenovo, NetApp, and Salesforce.com, four trends emerge:
European economies are headed for a recession, and European tech market is already in decline. Eurostat (The European Union statistical agency) announced on Tuesday, August 16, that real GDP in the 17 euro area countries and the 27 European countries both grew by just 0.2% in the second quarter of 2011 from the first quarter. Annualizing these growth rates to make them comparable with US GDP growth rates, the numbers were 0.8%. France's real GDP showed no growth, while Germany's real growth was o.4% on an annualized basis. These were sharp slowdowns from France's growth of 3.6% in Q1 and Germany's growth of 5.3%. With worries growing about a financial crisis hitting European banks as a result of potential losses on their holdings of Greek, Portuguese, Irish, Italian, and Spanish bonds, ongoing government austerity programs in these countries as well as the UK, and feeble EU efforts to deal with the problems, there is a high probability that Europe will slip into recession in Q3 and Q4 2011.